Investor Glossary-stock repurchase programInvestor Glossary-stock repurchase programInvestor Glossary-stock repurchase programInvestor Glossary-stock repurchase programInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Stock Repurchase Program

The HTML to link to this page
 

A stock repurchase program is initiated by corporations to buy back shares from its shareholders. In a stock repurchase program, the company will take excess cash and trade it for its own stock. After completion of the stock repurchase program, a company can chose to keep the repurchased shares or simply retire the shares. The direct impact of a stock repurchase program is an increased ownership in the company by each shareholder. Reasons for initiating a stock repurchase program are multiple. A stock repurchase program allows a company with excess capital to use its cash to improve its earnings per share (instead of paying out dividends) which provides its shareholders with long-term capital gains potential with a lower tax liability. Another reason companies use a stock repurchase program is when it thinks its share price is undervalued. They may use a stock repurchase program to boost its share price to a less discounted level. By reducing the amount of outstanding shares, a stock repurchase program can also be used to deter hostile takeover. Note that a stock repurchase program is different than a reverse stock split. Although in both cases, the number of outstanding shares is reduced, with a stock repurchase program, the actual value of each share is increased. In contrast, with a reverse stock split, although the share price is increased, unlike with the stock repurchase program, the actual value of the shares do not change. A stock repurchase program can also be called stock repurchase plan or stock buy back .



Rate this Stock Repurchase Program definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: in escrow, wholly-owned subsidiary, risk management, phantom income, class C shares, deferred tax, minority interest, 1031 exchange, command economy, stock market close, VIX, 144a, average price per share, cancelled check, deferred revenue, 401a, 1035 exchange, EBITDA, required rate of return, debt service coverage, option premium, current ratio, margin rate, open position, limit order, reverse mortgage, FICO score, Zero Cost Collar, covered put, ex-dividend, FTSE, real GDP, liquidity ratio, LIBOR, labor relations, balance sheet, implied volatility, Key Rate Duration, irrevocable trust, diluted share, quality assurance, retained earnings, stock split, inflation, APR, ex-dividend date, dividends payable, annual return, per diem


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use